Wall Street Week Ahead: AI gains, strong earnings support US stocks as tariff woes linger
second quarter earnings
reported and stocks near record highs, company results have reassured investors about the artificial intelligence trade that has energized Wall Street, even if tariff worries curtailed buying.
With results in from 297 of the S&P 500 companies as of Thursday, year-on-year earnings growth for the second quarter is now estimated at 9.8%, up from 5.8% estimated growth on July 1, according to LSEG data.
Explore courses from Top Institutes in
Please select course:
Select a Course Category
Data Science
Public Policy
Data Science
Cybersecurity
healthcare
Others
Data Analytics
MCA
Artificial Intelligence
Operations Management
Degree
Healthcare
Design Thinking
PGDM
Technology
CXO
Digital Marketing
Management
others
Finance
Product Management
Leadership
Project Management
MBA
Skills you'll gain:
Duration:
10 Months
E&ICT Academy, Indian Institute of Technology Guwahati
CERT-IITG Prof Cert in DS & BA with GenAI India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
11 Months
IIT Madras
CERT-IITM Advanced Cert Prog in AI and ML India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
10 Months
IIM Kozhikode
CERT-IIMK DABS India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
30 Weeks
IIM Kozhikode
SEPO - IIMK-AI for Senior Executives India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
11 Months
E&ICT Academy, Indian Institute of Technology Guwahati
CERT-IITG Postgraduate Cert in AI and ML India
Starts on
undefined
Get Details
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
No annual fees for life
UnionBank Credit Card
Apply Now
Undo
Next week investors will get a peek at earnings from Dow Jones Industrial Average constituents Disney, McDonald's and Caterpillar, for a look at the broader economy. Strong profit reports for these companies could propel the Dow, trading just shy of its December record high, to a fresh peak.
Some 81% of the companies have beaten analyst expectations on earnings, above the 76% average for the past four quarters.
"The earnings season has been unambiguously better than expected," Art Hogan, chief market strategist at B. Riley Wealth in Boston, said.
Live Events
The strength of corporate earnings is particularly reassuring for investors after the pummeling sentiment took in the prior quarter due to the twin threats of tariffs and worries over flagging economic growth.
"The first quarter was a bit more mixed and you had some questionable economic data ... which I think gave the market some pause," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
"But the second quarter seems to have just been a turnaround," Ghriskey said.
The strength of results for names linked to the artificial intelligence trade - the investment thesis that AI will be a transformative force, driving a significant portion of future economic growth and company profits - is particularly heartening, investors and analysts said.
"Overall it has been mega caps, growth/technology/AI that is driving a lot of the results," Ghriskey said.
"This is where we want to be exposed in terms of companies ... we're at maximum equity exposures and we're comfortable there."
Having boosted the market for several quarters, the trade ran into rough waters at the start of the year as the emergence of Chinese-founded artificial intelligence startup DeepSeek rattled investors, stoking concerns over heightened competition that could disrupt the dominance of established tech giants at the heart of the AI trade, including Nvidia.
Strong results from Microsoft and Meta Platforms reassured investors that massive bets on AI are paying off.
Worries over AI demand appear overblown, Macro Hive research analyst Viresh Kanabar said.
The trade related tumult earlier this year prompted many investors to pare equity exposure, particularly to higher-risk growth stocks.
Even after the market rebound - the S&P 500 is up about 6% for the year and near a record high - institutional investors have been slow to return to equities. Overall, investors' equity positioning is still only modestly overweight, according to Deutsche Bank estimates.
Strength in earnings from AI and technology names could draw more investors and lift markets further in coming weeks, analysts said.
"If you are trying to beat your benchmark and you were underweight any of the AI names you have to chase them," B. Riley Wealth's Hogan said.
After S&P 500's 2.2% gain in July, the seasonally volatile months of August and September, markets might face some short-term turbulence, Hogan said. Historically, August has marked a pick-up in stock market gyrations that peaks in October.
August kicked off with stocks selling off sharply on Friday as new U.S. tariffs on dozens of trading partners and Amazon's unimpressive earnings weighed on sentiment, while a weaker payrolls report added to risk aversion.
But any near-term market pullback should be seen as a buying opportunity, especially in some of the mega-cap, technology names, Hogan said.
With big AI names, Alphabet, Microsoft, Nvidia, Meta Platforms and Amazon, commanding about a quarter of the weight in the S&P 500, the health of the AI trade bodes well for the market at an index level, analysts said.
"We're not saying the weakness isn't there in other parts of the economy," Kanabar said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
24 minutes ago
- Economic Times
US stock market today: Palantir Technologies, Axon Enterprise, Yum Brands stocks jump but S&P 500, Dow Jones, Nasdaq are down
U.S. stock market indexes are slipping Tuesday following the latest discouraging signal on the U.S. economy. The S&P 500 was down 0.5 per cent in midday trading, coming off its best day since May, which followed its worst day since May. The Dow Jones Industrial Average was down 189 points, or 0.4 per cent, and the Nasdaq composite was 0.6 per cent lower. A weaker-than-expected report on activity for U.S. businesses in the transportation, retail and other services industries added to worries that President Donald Trump's tariffs may be hurting the economy. But increased hopes for coming cuts to interest rates by the Federal Reserve, along with a stream of stronger-than-expected profit reports from U.S. companies, are helping to keep the losses in Personal Care, the company behind the Schick, Playtex and Banana Boat brands, fell 20.2 per cent after reporting lower profit and revenue for the latest quarter than analysts expected. CEO Rod Little said it was a very weak season for sun care in North America, while tariffs are acting as a drag on slipped 0.7 per cent after likewise reporting a profit that fell short of analysts' expectations. Its operating profit sank 18 per cent from a year earlier, largely due to tariffs making its manufacturing costs more kinds of companies have been telling investors how much they expect tariffs to shave off their earnings this year, and trade policy was one of the most common topics U.S. services businesses talked about in the latest monthly survey compiled by the Institute for Supply Management about their activity.'Tariffs are causing additional costs as we continue to purchase equipment and supplies,' one company in the health care and social assistance business said, for example. 'Though we need to continue with these purchases, the cost is significant enough that we are postponing other projects to accommodate these cost changes.' Another business in the real estate, rental and leasing industry told the institute that economic 'uncertainty remains the dominant theme. However, the tariff talk has turned out to be much more bluster than actual policy, and businesses have seemed to tune out the noise.'Even the threat of tariffs isn't seeming to slow the juggernaut of investment flowing into artificial-intelligence Technologies jumped 7.9 per cent after the provider of AI platforms reported a stronger profit for the latest quarter than analysts expected. The AI darling also raised its forecast for revenue over the full year, and its stock climbed further after it had already doubled for the year so far coming into the day.'We continue to see the astonishing impact of AI leverage,' CEO Alex Karp said. Axon Enterprise leaped 15.1 per cent after the company, which sells Tasers, body cameras and software to public safety departments, reported a much stronger profit than analysts expected. It also cited growth in its AI offerings, which can save time for transcriptions and other tasks, and raised its forecast for revenue this year. On the losing side of Wall Street was American Eagle Outfitters, which dropped 9.8 per cent to give back some of its 23.6 per cent jump from the day before. That's when Trump weighed in on the debate surrounding the retailer's advertisements, which highlight actor Sydney Sweeney's great critics thought the ad's reference to the blonde-haired and blue-eyed actor's 'great genes' may be extolling a narrow set of beauty standards, while Trump said that being 'WOKE is for losers.' Yum Brands fell 3.2 per cent after the company behind KFC, Taco Bell and Pizza Hut reported results for the latest quarter that came up just short of analysts' expectations. The pressure is on companies to report bigger profits after the U.S. stock market surged to record after record from a low point in April. The big rally fueled criticism that the broad market had become too stock prices to look like better bargains, either companies need to produce bigger profits, or interest rates need to fall. The latter may happen in September, when the Federal Reserve has its next meeting. Q1. How are Yum Brands stocks performing?A1. Yum Brands fell 3.2 per cent after the company behind KFC, Taco Bell and Pizza Hut reported results for the latest quarter that came up just short of analysts' expectations. Q2. How are Palantir Technologies stocks performing? A2. Palantir Technologies jumped 7.9 per cent after the provider of AI platforms reported a stronger profit for the latest quarter than analysts expected. The AI darling also raised its forecast for revenue over the full year, and its stock climbed further after it had already doubled for the year so far coming into the day.
Time of India
28 minutes ago
- Time of India
Donald Trump says he will raise tariff of India 'substantially' in next 24 hours
Donald Trump TOI correspondent from Washington: Ties between US and India are headed downhill on the slippery slope of Russian oil. Accusing New Delhi of fueling the Moscow war machine, US President Donald Trump said he would, in the next 24 hours, raise tariffs on Indian exports "substantially" on top of the 25 per cent he has already announced. In a phone-in interview on CNBC, Trump claimed that New Delhi had agreed to zero tariffs for US exports into India, but asserted that's not good enough because of the Russia issue. "They're fueling the (Russian) war machine. And if they're going to do that, then I'm not going to be happy," a peeved Trump said, hours after New Delhi defiantly said it will continue to buy Russian oil, arguing that Washington had actively encouraged such imports by India for strengthening global energy markets stability. The fact that former US ambassador to India Eric Garcetti has confirmed this appears to have have irked the Trump White House, which suggests that the Biden administration gave India a free pass. The rules have now changed, forcing New Delhi -- and many countries across the world -- to consider switching policy depending on which party comes to power in America. In a separate interview on Fox News, Trump aide Stephen Mller said Trump "has been very clear that it is unacceptable for India to continue funding this war by buying oil from Russia.' Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Pierce Brosnan's Wife Lost 120 Pounds - This Is Her Now Undo by Taboola by Taboola 'People are shocked when they learn that India is actually on par with China in terms of the volume of Russian oil purchases. That is a striking fact,' Miller said. Yet, the Trump White House has adopted different rules for different countries, cutting China plenty of slack because of the leverage it wields in terms of critical exports to the US like rare earths, compared to India. Similarly, countries that resist US hectoring and push back, like Canada, have attracted immediate punitive tariffs, compared to countries that have rolled over (Japan and South Korea) or bought have time (Mexico). In the CNBC interview, Trump continued his tirade against India for its high tariffs despite claiming New Delhi had agreed to lower it to zero. "Now I will say went from the highest tariffs ever, they will give us zero tariffs, and they're going to let us go in. But that's not good enough, because because of what they're doing with (buying Russian) oil," Trump said. The US President also knocked down current trade with India, which stands at around $135 billion, saying "we do very, very little business with India because their tariffs are so high." India ranks 9th on the list of US trading partners, but Trump is irked by the $45 billion trade deficit caused by India's $87 billion exports to the US, compared to its imports from the US of $42 billion. "So India has not been a good trading partner, because they do a lot of business with us, but we don't do business with them," he complained even though India has pledged to reduce the deficit by buying more US arms and armaments, oil and gas, among other exports. He wants India to open its markets for US auto industry like Japan, South Korea, and EU have done despite American car manufacturers being run out of a competitive global market. Trump's trade and tariff rampage has affected countries far and wide, rich and poor, with former allies and adversaries being re-arranged depending on who bows and scrapes before the US President with flattery and pledged of big investments in America. The US President threw out numbers like a $600 billion investment from EU and $500 billion from Japan among other pledges -- even though details of the purported agreements remain sketchy -- to boast that money is flowing into the US and the country is rich again. Trump's trade-centric, America First approach at the expense geo-political considerations has sent many world leaders scrambling to Washington. Switzerland's President Karin Keller-Sutter is rushing to the White House this week to negotiate lower taxes after Trump slapped a 39 percent tariff on the country, ostensibly because she was not obsequious enough during an argumentative phone call. The US is a big market for US for Swiss products such as luxury watches, jewellery, chocolate, and pharmaceuticals. While these items and products will become more expensive for American customers (as will items ranging from apparel to seafood that India exports to US because of the 25% plus tariffs), it will allow countries with lower tariffs to take advantage of the differential.
Time of India
an hour ago
- Time of India
10 genius grocery hacks to beat rising food prices in the US
Grocery bills are stretching wallets tighter than ever. In a recent Associated Press-NORC poll, 53% of Americans named food costs as their top financial stressor, more than housing, health care, or even credit card debt. The Consumer Price Index backs that up: grocery prices jumped 2.4% over the last year, and eggs alone saw a shocking 27.3% spike. From meats to milk, every major category got costlier. If you're looking to save without sacrificing your shopping list, these ten smart grocery hacks can help. Check your shelves before going to the store Before you step out to shop, peek into your pantry, fridge, and freezer. You might already own half the ingredients for dinner. Few apps let you plug in what you have and suggest recipes, no extra spending required. Lists are your new best friend A list isn't just helpful—it's your budget's bodyguard. Plan meals, jot down only what you need, and resist temptations like limited-edition cookies. Few apps make it easier by helping you meal-plan ahead of time. Freeze what you don't need right away If you spot a great deal on bread, meat, or berries, buy extra and freeze the rest. It prevents waste and saves you from paying full price next week. Buy in bulk (Selectively) Things like rice, oats, beans, and nuts are often cheaper in bulk bins. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Find Out More About How People Travel for Less vividtrendlab Learn More Undo Just make sure it's something you'll actually use before it goes stale. Midweek is the money-saver's sweet spot Shop on Wednesdays. According to Google Maps, grocery stores are quieter midweek, so you'll be more focused and less likely to impulse-buy. Bonus: many stores drop their new weekly deals that day. Go full fruit and veggie Skip the pre-chopped options. A whole carrot or onion costs way less than the sliced version. You'll pay with a bit more prep time, but your bank account will thank you. (Though maybe skip oranges for now, they're pricier due to shortages.) Use Loyalty Programs Most grocery stores have free membership programs that offer digital coupons or points you can redeem for discounts or freebies. Sign up, it adds up fast. Do the unit price math Check the price per ounce, gram, or item—not just the sticker cost. A jumbo pack might be cheaper in the long run, even if it looks more expensive up front. It's all about cost per use. Never shop on an empty stomach Seems obvious, right? But hunger makes you throw extra stuff in the cart, snacks, junk, even candles. Eat a snack or meal before heading out so your cravings don't control the list. Plan meals around sales Instead of planning meals and then shopping, reverse it. Check weekly flyers and base your menu on what's on discount.
